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Michigan Taxpayers Alliance Updates: Final battle brewing...

Thursday, September 3, 2009

Final battle brewing...


It's happening right now: as tax revenues plummet, the government class is digging in for the battle of their lives to protect their privileged status in Michigan's economy. And politicians are now being forced to take sides with either taxpayers or with public employee unions.

Detroit in the eye of the storm...

Few government reformers have taken on a more impossible task than Detroit Public Schools Emergency Financial Manager Robert Bobb, who is trying to restore fiscal and functional sanity to the national disgrace that is the Detroit Public Schools. Now, Bobb is being sued by a defiant Detroit School Board determined to protect the status quo that they created and have benefited from.

Kudos to Attorney General Mike Cox, who will defend Bobb against the School Board's retaliatory suit.

Detroit Mayor Bing, meanwhile, is facing a fierce, daily battle with Detroit's unionized city employees, who believe they should be immune from the City's 22% unemployment rate, plummeting population, and evaporating tax base. These unions are more highly compensated than employees in similar cities (according to a Detroit Free Press study), but they won't concede a penny in adjusted benefits or pay.

Meanwhile, in the suburbs...

Has your pay been increasing these last few years? The union representing the professors at Oakland University think that a 10% pay hike over the past three years wasn't good enough. These professors (all public employees paid with your tax dollars) are preparing to strike today. They received raises of between 3% and 3.25% each year since the last contract approval in 2006, but their union isn't satisfied and wants even more.

Most students and their financially struggling families have experienced big income decreases these last few years, while tuition has gone up and up. These students, who already paid their tuition this semester, will likely be without professors in their classrooms this week.

Lansing's big battle...

Less than a month is left before the state is required to have a budget in place, Stunningly, Governor Granholm has yet to even propose a budget. Senate Republicans have actually proposed and passed a balanced budget with NO tax hikes. Granholm's proposal? Bring in "mediators" to coax Senate Majority Leader Mike Bishop into allowing another round of tax hikes.

And public employee unions are weighing in. A new organization of public employee unions and social service organizations is urging Granholm to raise taxes on citizens again - by $3 billion - with increased business taxes, re-instating the death tax, and promoting a graduated income tax.

But the tax eaters don't really expect to win their $3 billion is tax hikes this year. They know that this year's state budget is merely a preliminary skirmish before next year's really big battle. This year's budget is important, but federal stimulus money will help conceal much of the state's structural deficit for one more year. Next year's "budget crisis" will be more than double or triple the problem of this year's state overspending - and the public employees know it. Their strategy is to use this year's budget to dig in and prepare for next year's major battle.

Citizens are catching on...

There is more and more mainstream media coverage of the extraordinary pay and benefits that the government class - public employees and politicians - receive compared to citizens. Check out this recent Free Press article.

Democrat House Speaker Andy Dillon's modest proposal to address the cost of public employee health benefits was an unexpected shot across the bow of the public employee unions. The enormous attention that Dillon's proposal attracted from both the media and the government class is testament to the growing understanding that something must give: either taxes must be hiked (again), services to citizens slashed, or the cost of providing services must be reduced by right-sizing the extraordinary benefits provided to the government-class.

Dig in, friends...

Next year will be unbelievable compared to this year. The impact of plummeting property values will finally start kicking in for local governments and public schools. The state budget will implode under unsustainable spending without increased federal subsidies.

And the government class knows all this. They are preparing to defend every pay hike, paid holiday, benefit, perk, and privilege they get at your expense. And they will fight with everything they have.

The future of Michigan will be at stake like never before. Watch your local and state lawmakers. Accept no excuses. This next year - starting with the current skirmish in Lansing - will absolutely force politicians to take sides as never before.

Whose side are your elected officials on?

Leon Drolet
Director, MI Taxpayers Alliance